The rates within a weak downtrend, in favor of CHF. At the same time, during the last 6 months, we can see signs of a trend reversal. The support line has already turned to the upward direction, while the resistance line is still directed downwards. As for the fundamental factors, it should be noted that the canadian dollar receives more incentives for growth, but it's periodically under pressure due to the trade conflict between the USA and China, as well as due to the unstable situation on the oil market.
CHF as a safe asset is less interested by investors due to the economic downturn in Switzerland and the EU. Nevertheless, this week the Swiss franc managed to strengthen with the growing fears of new trade conflicts, as well as with the increasing risks upon investing in commodity currencies. In addition, the latest reports showed GDP growth in Switzerland in the 1st quarter by 1.7%, while a much more modest growth by 1% was expected. That is much higher growth rate compared to other EU countries nowadays.
The canadian dollar was under pressure this week in all respects. First, CAD fell by the decision of the Bank of Canada to leave the rate unchanged, and today lost in price due to the fall in oil prices, taking into account develop of the trade conflict between China and the United States, as well as decrease in business activity in the manufacturing sector of China to 49.4 pips, which means that the demand for oil in China may decrease in the near future.
After today's fall in oil prices and lower demand for risky assets, there is every reason to expect a certain recovery and strengthening of CAD. The canadian dollar may also receive support with the publication of data on Canada's GDP, and next week - with the release of data on the trade balance and situation with employment. The abolition of trade duties on imports of metals to the United States, should stimulate the canadian economy to further growth. Therefore, in this situation, the deals to BUY can be effective in the short term. At the same time, there are doubts about the reversal of the trend, given the illusory prospects of resolving the trade conflict between the US and China, as well as the prospects for restoring the previous growth rate of the world economy. Therefore, the deals on the trend still can be relevant.
